Sonatrach has awarded a contract for the construction of a petrochemical complex in western Algeria to the Sino-British consortium Petrofac-HQC. Initially, the project was to be carried out in partnership with TotalEnergies. This is the pretext of an increase in the cost of production.
The Algerian public energy company Sonatrach announced on May 18 the award, via its subsidiary Step Polymers, of a contract for the construction of a polypropylene plant in Oran to the Sino-British consortium Petrofac-HQC. The construction of this petrochemical project will take place in the industrial zone of Arzew, west of Algiers, its press release announced.
It will be intended to produce 550,000 tons per year of polypropylene for an amount of 1.5 billion dollars in one of the most important oil industrial zones in Algeria. STEP Polymers Spa is a wholly owned subsidiary of Sonatrach Spa. This is a petrochemical engineering, procurement and construction (EPC) contract.
“The total value of the contract is approximately $1.5 billion, with Petrofac’s share valued at over $1 billion, ” Petrofac said in a statement.
Petrofac has won several contracts in Algeria in recent years. On September 29, 2022, the Sonatrach group announced that it had awarded two contracts to groups made up of Petrofac, for a total amount of 500 million dollars, recalls the Turkish agency Anadolu.
Explanations from Total
The announcement of the launch of this project dates back to 2018. It was initially to be carried out in partnership between TotalEnergies and Sonatrach, but the French energy giant withdrew in favor of the Algerian public oil group, notes the Algerian media TSA. Sonatrach did not give the reasons for the delay of the project.
For its part, the French energy giant explained its withdrawal from the project to TSA
“ Following the increase in project costs, TotalEnergies agreed with Sonatrach to sell its interests in the joint venture STEP, co-owned by Sonatrach (51%) and TotalEnergies (49%), thus leaving Sonatrach the initiative to launch the development of the project”.
TotalEnergies ensures however that even after its withdrawal, it makes available to Sonatrach its “technical expertise in the execution of the project as well as its commercial skills in the marketing of polymers on the European market”, quotes TSA again.
